money & Banking

Joel Callen

5 things money-wise people never do

5 things money-wise people never do

It’s easy to fall prey to hidden service fees, slick marketing hype and sneaky sales pitches. Here’s a few tips to steer clear of some typical financial pitfalls.

Think before you get lured by the clearance sale signs – As much as getting a bargain is important to those with a head for money, just because something is cheap doesn’t make it a bargain if you don’t need it and won’t use it. Think carefully about what you will do with something before you make the purchase.

Steer clear of full-price household items – Waiting until end-of-season sales ensures you can stock up on wardrobe essentials without breaking the bank. There’s nothing more annoying than buying a suit then seeing it half price a week later!

Furniture and white goods can be purchased through factory outlets, or ask sales assistants about floor stock which may be slightly marked but heavily discounted. Also don’t be afraid to ask, especially when making a big purchase, whether the advertised price is the best price they can do, and to request a discount for multiple purchases. You may be surprised how far they’re willing to go for your business.

Related link: The surprisingly frugal spending habits of the rich

Do your research before buying big-ticket items – Many large stores price match, even if they don’t advertise it, because they want to keep your business. Before you make a big purchase ensure you research the product online – read reviews on comparison sites and ask friends for advice about which items are the best value for money.

Pay that interest on your credit card – Money-smart people don’t have credit card debt that can’t be paid off each month. Minimise the number of credit cards you have (one is usually enough to do things like internet purchases) and make sure you get one that works for you. Perhaps pick one with an interest-free period, or one that allows you to earn points and pay off the balance in full each month. Or, better yet, if you know you might struggle to pay it off, ditch the credit card altogether and use a debit card instead.

Resist buying that brand new car – There’s a saying that you lose money on a new car as you are driving it out of the yard because cars depreciate in value very quickly. Buying a near-new second-hand car or a demonstration vehicle means you get a lot more bang for your buck. You’ll pay less through a private seller than a dealer, but make sure you enquire about the reasons for selling and check that the car doesn’t have finance owing and hasn’t been in any accidents before you commit to buying.

Related links:

Foolproof budgeting for retirement

Great money saving hacks

5 money lies we tell ourselves that are bleeding us dry